Friday, November 26

Posthaste: If you haven’t started shopping yet, you could be facing an IOU Christmas


Good Morning!

It’s starting to look a lot like a supply crunch Christmas.

As global bottlenecks brought on by the pandemic, rising demand and labour shortages delay shipments of goods and hike prices, getting that perfect gift may never have been so tricky.

Three in five Canadians who have already started their Christmas shopping say they have not been able to find what they want, according to a new poll by KPMG.

And those who haven’t started are getting nervous.

“While most have yet to start shopping, they are quickly coming to the recognition that they need to get going quickly or this year’s gift giving will include a lot of IOUs,” said KPMG.

More than 57% of those surveyed had not started their shopping, either because they are waiting for Black Friday/Cyber ​​Monday bargains or they are just last-minute shoppers. This year they risk not being able to get what they want online or on store shelves in time, said KPMG.
Two-thirds say if they don’t order by mid-November, they doubt their gifts will arrive in time and some fear they have already missed the cutoff.

“Topping the wish list this year is that your container ship actually arrives in time for the holidays,” says Jérôme Thirion of KPMG in Canada. “Our poll findings show that the majority of Canadians are finding it difficult to buy what they want when they want it due to global manufacturing disruptions and supply shortages.”

Back logs at ports that are working 24/7 to meet holiday demand and a shortage of shipping containers have almost doubled shipping times, with containers taking 24-36 days to get from China to Canada. Bloomberg Economics supply indexes show shortages just off a 20 -year high and shipping costs have risen by up to fourfold.

These costs are being passed onto the consumer. Canada’s inflation rate rose 4.4% in September, the fastest pace in almost 20 years.

But while Bank of Canada expects inflation to fall back to its 2% target by late next year, nearly two-thirds of Canadians surveyed see it sticking around for longer even after supply disruptions end.

Canadians are feeling the biggest supply pinch for building materials, electronics, TVs and computers, appliances, cars and trucks, food products, especially frozen meals, furniture and clothing, in that order.

“Consumer demand will peak over the next few weeks with the advent of the holiday season, and many shoppers will find likely empty shelves, “out of stock” notifications online, and delivery dates that miss the holiday window and stretch well into 2022,” said Thirion.

The crunch has changed how Canadians shop and what they expect from companies. Seventy-three per cent are buying products made in Canada rather than overseas and 55% say they are stocking up on basics.

The majority (87%) also expect companies to provide real-time online information about their supply of product, delivery times and to be flexible on returns.

Peter Hughes of KPMG Canada said brands shouldn’t underestimate the impact of supply chain disruptions on customers. “Brands that can’t deliver on time could lose some of their most loyal followers,” he said.

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financialpost.com

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